December 8, 2017

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Nearly $64 million in bitcoin is missing following NiceHash marketplace hack

by John_A

Cryptocurrency is booming — the rise and rise of bitcoin has been one of the biggest stories of the latter part of 2017. Now, we have seen a glimpse of the more troubling side of the technology, as an attack on a major mining marketplace has resulted in almost $64 million worth of bitcoin being stolen.

“Unfortunately, there has been a security breach involving NiceHash website,” reads a statement posted by the company in response to the situation. “We are currently investigating the nature of the incident and, as a result, we are stopping all operations for the next 24 hours.”

NiceHash is a service that allows customers to exchange their hardware’s processing power for the purposes of verifying bitcoin hashes. When they want to cash out, they are paid in bitcoin.

The payment system employed by NiceHash was reportedly compromised, which allowed thieves to drain the contents of its bitcoin wallet. The authorities have been notified and the company is working on its own investigation into exactly what happened, and the best course of action.

Approximately 4,700 bitcoins were stolen, according to the company’s head of marketing Andrej Škraba, who spoke to The Guardian. Concerns were first raised among users when the website began behaving strangely, at which point NiceHash’s social media presence was the target for a bevy of queries and complaints.

“We would not exist without our devoted buyers and miners all around the globe,” read its response to the attack. “We understand that you will have a lot of questions, and we ask for patience and understanding while we investigate the causes and find the appropriate solutions for the future of the service.”

It’s easy to see why there’s so much excitement about cryptocurrency, but a situation like this demonstrates what can go wrong. This isn’t tried-and-tested infrastructure, and attacks can and will happen — as we saw with the high-profile Equifax hack, unseen vulnerabilities are all-too-common.

This isn’t to say that bitcoin or cryptocurrency are inherently dangerous or untrustworthy, but there is certainly an element of risk when it comes to using a service like NiceHash.

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